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Africa on cusp of M2M boom

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The advancement of ICT in Africa has put it in a strong opportunity to capitalise on technology in the machine-to-machine field, says KEES SNIJDERS, MD of Flickswitch.

Thanks to the advancement of Information and Communications Technology (ICT) on the continent, Africa is in a strong position to capitalise on forecasts that the machine-to-machine (M2M) sector will generate $40 billion in global services revenue by 2019, says Kees Snijders, MD of Flickswitch.

Machine to machine refers to direct communication between devices using any communications channel, including wired and wireless. Forming part of the Internet of Things, M2M enables systems to communicate with other devices anywhere in the world.

“Africa has an enviable reputation of using technologically-driven solutions to overcome many of its challenges. And while not all countries share the same priorities, there are sectors that are universally important across the continent. These are agriculture, asset tracking, retail payments, and energy.”

He believes that M2M has an important part to play across these industries to not only improve efficiencies but also to reduce costs.

Water and agriculture management improves

“By implementing M2M to help with flow and pump monitoring, wastage in water can be reduced. We know too well that it has become an incredibly scarce resource on the continent. The rapid detection of leaks and careful monitoring of dam and reservoir levels mean that M2M solutions can notify relevant authorities before water levels are dangerously low,” says Snijders.

Of course, it goes beyond just water monitoring. M2M is also able to track game and livestock through technology such as tracking systems and drones. This means farmers have a more real-time view of what is going on around them and where specific issues are that need to be addressed.

In South Africa, a solutions provider has developed a livestock collar incorporating GPS and GSM technology that monitors the behaviour of a group of animals and sends an alert to the farmer’s mobile phone if there is abnormal behaviour (normally associated with theft or a predator attack).

Meanwhile, in the United States, a law was passed in November last year permitting companies to fly drones commercially on a case-by-case basis. This means that for the first time, agriculture drones will (legally) gather data across an entire growing season. By significantly improving the intelligence they have at their disposal, farmers will now be able to not only test their business models, but also become significantly more efficient. Given the significant water shortages in South Africa, drones could play a similarly critical role in our near future..

M2M is more than just about vehicle tracking

“M2M enables businesses to closely monitor goods that are in transit. Everything from the temperature at the back of the truck and its ambient conditions, to finding the optimum route, can be done using the technology. Perhaps more interesting is the fact that the traditional tracking businesses are not necessarily the ones adopting the most advanced M2M solutions.”

According to Snijders, this has created an opportunity for smaller businesses to come up with innovative use cases for M2M that can appeal to a number of vertical sectors. “The level of sophistication required to keep up with theft and hijackings means traditional tracking devices are no longer good enough. M2M enables providers to adapt their solutions to meet changing requirements faster and more cost-effectively”, he says.

Research from MarketsandMarkets.com indicate the fleet management market is certainly a priority for many organisations globally. Rising global concerns around the environment and an increasing need for operational efficiencies in the fleet sector fuel expectations that the sector will grow from $8 billion in 2015 to $22.53 billion by 2020.

On the retail point of sale (PoS) front, there is a lot of movement happening thanks to M2M

“As the capabilities of consumer devices improve, mobile payment solutions like SnapScan and M-Pesa are driving significant growth in retail payments. Different markets are doing the things that suit their specific audiences, forcing retailers to think differently around M2M and adopt technologies in new and exciting ways. The pervasiveness of pay points is adding to this growth.”

Developing countries are in prime position to benefit from the strength of PoS in the M2M world. Brazil, the largest M2M market in Latin America, has already seen a compound annual growth rate of 48 percent over the last four years in M2M thanks mainly to PoS terminals connected by GSM.

Snijders adds that, “As with agriculture and water, energy is a vital sector on the continent.

Things like smart metering and solar are certainly increasing in adoption rates but they are not pervasive as yet. With energy presenting such a significant growth sector, we can expect sizeable investment to take place. Additionally, many operators are using M2M as a great way to showcase its potential in the energy sector.”

Research conducted by Ovum show that the energy and utilities sector is one of the most important ones in the global M2M market. The consultancy projects the sector to hit $7 billion in global revenue by 2018. Given the critical nature of energy in Africa, it could well be a good one to invest for the coming years.

Companies across Africa need to be aware that M2M is not only growing but thriving. Decision-makers need to think outside the box and leverage advances in technologies in innovative ways to capitalise on this.

Africa News

Africa phones go flat

Africa’s mobile phone market declined 2.1% quarter on quarter in Q3 2018 according to the latest figures from IDC.

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The global technology research and consulting firm newly released Quarterly Mobile Phone Tracker shows overall shipments for the quarter totalled 52.6 million units, with feature phone shipments falling 2.7% QoQ and smartphone shipments declining 1.3% over the same period.

Transsion brands (Tecno, Infinix, and Itel) led the feature phone space in Q3 2018, with a combined unit share of 58.2%. Nokia was next in line with 11.7% share. Transsion, Samsung, and Huawei dominated the smartphone space with respective unit shares of 34.9%, 21.7%, and 10.2%. However, in value terms, Samsung led the smartphone market with 37.2% share, followed by Transsion (21.0%) and Huawei (13.0%).

There were differing fortunes in the region’s three major markets, with Nigeria suffering a heavy 11.6% QoQ decline in mobile phone shipments, while South Africa and Kenya saw respective QoQ growth of 8.5% and 7.9% in Q3 2018.

“The decline in Nigeria stemmed from a slowdown in government spending, ongoing warfare in the country’s northern states, and market uncertainty in the lead up to elections,” says George Mbuthia, a research analyst at IDC. “In South Africa, the market’s growth was spurred by the penetration of low-end devices from brands such as Mobicel, Mint, and Nokia, while the launch of entry-level smartphones helped drive growth in Kenya despite increases in taxes and fuel prices placing a significant burden on disposable income in the country.”

While feature phones remain steadfastly popular across Africa, particularly in more rural areas, consumers are increasingly being attracted by smartphone offerings from Chinese brands such as Xiaomi, Oppo, and Huawei, which are actively targeting feature-oriented customers at more economical price points.

“There is a new wave of Chinese brands aggressively pursuing growth opportunities in the region, while the more-established Huawei is also accelerating its marketing efforts and expanding its distribution budget,” says Ramazan Yavuz, a research manager at IDC. “These brands have quickly progressed along the learning curve and evolved their offerings to perfectly reflect the realities of the region by addressing the diverse pricing and feature needs of the consumer base.”

Looking ahead, IDC expects Africa’s overall mobile phone market to reach 58 million units in Q4 2018, spurred by the festive season and online consumer events such as Black Friday. The introduction of more affordable smartphones in the African market will help drive progress in this space over the coming quarters, while the share of feature phones will decline steadily as the transition to smartphones gathers momentum.

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Mobile money to cross borders

Orange and MTN launch pan-African mobile money interoperability to scale up mobile financial services across Africa.

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Two of Africa’s largest mobile operators and mobile money providers, Orange Group and MTN Group, today announced a joint venture, Mowali (mobile wallet interoperability), to enable interoperable payments across the continent. Mowali makes it possible to send money between mobile money accounts issued by any mobile money provider, in real time and at low cost.

Mowali will immediately benefit from the reach of MTN Mobile Money and Orange Money, bringing together over 100 million mobile money accounts and mobile money operations in 22 of sub-Saharan Africa’s 46 markets. Mowali is ready to enable interoperability between digital financial service providers beyond MTN and Orange operations and markets, to support the existing 338 million mobile money accounts in Africa.

Mowali is a digital payment infrastructure that connects financial service providers and customers in one inclusive network. It functions as an industry utility, open to any mobile money provider in Africa, including banks, money transfer operators and other financial service providers.

The objective of Mowali is to increase the usage of mobile money by consumers and merchants.  Mowali enables money to circulate freely between mobile money accounts from any operators in all countries.  From the customer’s point of view, this means “I can pay or receive money anywhere from my mobile account regardless of my operator”. The system will unlock further innovation in the digital financial space within the continent. 

For Stéphane Richard, Chairman & CEO of Orange, “by providing full interoperability between platforms, Mowali will provide an important step forward that will allow mobile money to become a universal means of payment in Africa. Increasing financial inclusion through the use of digital technology is an essential element in furthering the economic development of Africa, particularly for more isolated communities. This solution embodies Orange’s ambition to be a leading player in the digital transformation of the continent. By joining forces with another of Africa’s market leaders, MTN, we aim to accelerate the pace of this transformation in a way that will change the lives of our customers by providing them with simpler, safer and more advantageous services. “

“One of MTN’s goals is to accelerate the penetration of mobile financial services in Africa, Mowali is one such vehicle that will help us achieve that objective. Furthermore, co-operation and partnerships that help us accelerate the pace of development and overcome some of the scale, scope and complexity of challenges that society faces are key. This partnership with Orange is therefore an important step in helping us play a meaningful role in supporting the United Nations’ Sustainable Development Goals related to eliminating extreme poverty and enhancing socio-economic development in the markets we operate in and beyond. Thus giving our customers access to a bright, digital future.” said Rob Shuter, Group President and CEO of MTN.

The GSMA supports the Mowali initiative as interoperability at this scale is a key accelerator for both financial inclusion and Mobile Money usability across Africa.  “Today, there are over 690 million mobile money accounts around the world. Mobile money services have become an essential, life-changing tool across Africa, providing access to safe and secure financial services but also to energy, health, education and employment opportunities. The creation of Mowali will help to further transform mobile financial services throughout the African region. It demonstrates the mobile industry’s continued leadership and commitment to driving financial inclusion and economic empowerment through industry collaboration. The GSMA is proud to support its development,” said Mats Granryd, Director General, GSMA.

“Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome, in support of financial inclusion. With Mowali, Orange and MTN deliver a solution that will enable them, and other companies, to scale digital financial services across Africa, faster, to everyone—including the poor,” said Kosta Peric, deputy director of Financial Services for the Poor, at the Bill & Melinda Gates Foundation “This is a signal that a new wave of innovation, which can help alleviate poverty and drive economic opportunity, is coming. We’re pleased to see an implementation of Mojaloop—an open source payment platform available to operators across the sector—help achieve that.”

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